Capitalism is like Ambition

[catsittingstill]

It"s a great engine for getting things done.

But if it isn't bridled, the results often turn out bad for all concerned.

We've been stripping the bridle off capitalism for the last twenty years or so, and it got us the mortgage meltdown, the credit crunch, and the current falling stock market, and an enormous increase in the wealth gap between the richest one half of one percent and the normal world.

Of course Capitalism doesn't like it when we start putting the bridle back on; it's got used to being able to go in whatever direction, at whatever speed, it damn well pleased, and to eating people's gardens to the bare dirt along the way.  We should bridle it anyway; it will get used to being a tame horse again.  As tame as it was under Reagan, anyway.

Comments

[pocketnaomi.livejournal.com]

Amen. I don't insist on being able to ride it, but I'm getting really sick of being trampled under its hooves.

[technoshaman.livejournal.com]

There's capitalism, and there's unmitigated, lie-like-a-dog, screw-the-rules, rape-pillage-and-burn *greed*.

I don't have any problem with folks who want to sell a good product at a fair price.

I take extreme issue with legalized sociopathy and gambling being the basis for society. It's ruined our banks, our healthcare system, and our country. When people live and die by Wall Street rather than Main Street... that fails the Kantian Imperative. Epically.

Now, how we stuff this pony in a round pen is a whole 'nother ball game....

[bigbumble.livejournal.com]

Bring back the 90% tax bracket.

[technoshaman.livejournal.com]

Disagree, and I'll tell you why, using one of the oldest examples in our nation's history. Gen. George Washington refused a salary for commanding the Continental Army. He did, however, asked to be reimbursed for his expenses. As I understand it, George lived *quite* well even through the Winter of the Bloody Sevens. Bring back the 90% tax bracket, and suddenly expense rules get *quite* liberal.

In other words, people *will* find a way around the rules.

people *will* find a way around the rules

[bigbumble.livejournal.com]

Yup, right now they use various legal techniques to get around paying the 35% rate by converting income to the 15% capital gains rate. That is why you hear about a corporate boss paying taxes at a lower rate than his secretary. At 90% for regular income the capital gains rate was about 45%. That is what I figure the wealthy would really pay at most. There is a limit on the amount of expenses that can be deducted from taxes and I expect that corporate America, even now, does its best to push that limit.

[ndrosen.livejournal.com]

Stripping the bridle off capitalism? You mean by passing the Sarbanes-Oxley law, greatly expanding the SEC budget, expanding the Federal Register of regulations, encouraging subprime lending through the Community Reinvestment Act, helping to create a market for allegedly AAA tranches of securitized mortgage debt by requiring certain institutions to invest in highly rated bonds, and a few other things like that?

Or do you mean stripping the bridle off state capitalism, not private capitalism, by letting Fannie Mae and Freddie Mac engage in heads-we-win,-tails-the-government-bails-us-out highly leveraged investments?

No doubt you can find some instances of actual deregulation to object to, but that isn't the main cause of our economic problems. In fact, the regulations I complained about are not the main cause. We've hit the trough of the 18 year real estate cycle; that's the biggie. Land prices are especially subject to speculative bubbles, because they aren't making any more land; when the price goes up, people want to rush to buy before it goes up further, so the bubble feeds on itself, right until it bursts. And mortgages, securities based on mortgages, and so on become toxic assets. Read Henry George; he pretty much explained the crash of 2008 back in 1879.

[mindstalk.livejournal.com]

Krugman does blame it all on lack of regulation: it's largely a banking panic on a new and unregulated sector of finance. His two basic rules going forward were to bring back 20% down requirements for mortgages, and "if the Fed will have to bail it out if it fails, the Fed gets to regulate it."

[randwolf.livejournal.com]

Whence this post? Not that I disagree, but why now?

BTW, it's been more like 30 years. Deregulation began with Reagan and, especially, his corruption of the SEC and the federal banking regulation system. John McCain was also a part of that, as one of the Keating Five.